Can you get a fixed mortgage rate?
A fixed-rate mortgage offers you consistency that can help make it easier for you to set a budget. Your mortgage interest rate, and your total monthly payment of principal and interest, will stay the same for the entire term of the loan.
Fixed-rate mortgage requirements
There are many types of fixed-rate mortgages with different borrower requirements. However, if you're applying for a conventional mortgage — the most common type — you'll likely need a credit score of at least 620 and a down payment of at least three percent.
Interest costs on a $300,000 mortgage
Again, the interest you'll pay on a $300,000 home loan will depend on the mortgage interest rate you qualify for. With a 7% rate, as in the above example, you'd pay $418,527 over a 30-year period.
Choosing a fixed rate mortgage means you won't be affected if interest rates go up or down for a set number of years. Your home may be repossessed if you do not keep up repayments on your mortgage.
The main advantage of a fixed-rate loan is that the borrower is protected from sudden and potentially significant increases in monthly mortgage payments if interest rates rise. Fixed-rate mortgages are also easy to understand.
The primary disadvantage of the 30-year fixed rate mortgage is that you'll probably end up with a higher interest rate compared to a loan with a shorter term or an adjustable mortgage. That's the price you pay for the long-term stability.
The main advantage of a fixed mortgage rate is that, whether interest rates go up or down during the term, your rate and regular payments would stay the same for the term selected. You can select a term length of 6 months, 1 year, 2 years, 3 years, 4 years, 5 years, 6 years, 7 years, or 10 years.
To afford an $800,000 house, you typically need an annual income between $200,000 to $260,000, depending on your financial situation, down payment, credit score, and current market conditions. However, this is a general range, and your specific circumstances will determine the exact income required.
What are the average repayments on a £70k mortgage? At the time of writing (April 2025), the average monthly repayments on a £70,000 mortgage are around £369. This is based on a capital repayment mortgage taken over 25 years, with an interest rate of 4%, which is representative of the UK market in recent months.
The monthly cost of a $500,000 mortgage is $3,360.16, assuming a 30-year loan term and a 7.1% interest rate. Over the course of a year, you would pay $40,321.92 in combined principal and interest payments.
Can I negotiate my fixed rate mortgage?
When hammering out mortgage details with a lender, you can — and should — negotiate your mortgage rate. Regardless of what the current mortgage rates are on the lender's website, don't assume they can't go lower. You'll likely pay a higher rate if you accept the first offer you're presented.
- Barclays' Green Home 5 year fixed rate mortgage at 3.96% (Max LTV 60%, fee £899). You'll need to meet its green mortgage criteria to be eligible for this rate.
- First Direct's 5 year fixed rate mortgage at 3.99%. Max LTV 60%. ...
- Barclays' 5 year fixed rate mortgage at 4.06%. Max LTV 60%.
| Product | Interest Rate | APR |
|---|---|---|
| 15-Year Fixed Rate | 6.16% | 6.24% |
| 10-Year Fixed Rate | 6.01% | 6.08% |
| 30-Year Fixed Rate FHA | 6.93% | 6.99% |
| 30-Year Fixed Rate VA | 6.94% | 6.99% |
Other distinctions: ARMs' initial interest rate is lower, but they often demand bigger down payments and bigger income from borrowers than fixed-rate mortgages. Fixed-rate mortgages offer stability and predictability in monthly payments, making them a better choice for long-term homeowners.
If you are looking for a short-term, flexible mortgage, a two-year fixed option will likely work best for you, while those looking to work on steadier, long-term financial goals may benefit more from a five-year fixed mortgage.
Savings Account:
While savings accounts are excellent for emergency funds or short-term goals due to their liquidity, they don't lock in a fixed interest rate. This means the interest rate on a savings account can fluctuate over time, so your long-term returns might not be as predictable as with a Certificate.
Although it's rare, some lenders may charge prepayment penalties for paying your loan off early, which could negate some of the money you'd save on interest. Your payment may increase.
The main advantage of a fixed rate home loan is certainty. You can lock in or 'fix' your interest rate for a certain period of time – typically between one and five years – and plan for the future, knowing that your repayments will stay the same during that time.
Is a 3.5% interest rate good? In today's climate, 3.5 percent interest on a mortgage is below average.
- JP Morgan Chase: 4.81%
- DHI Mortgage Company: 5.58%
- State Employees' Credit Union (SECU): 5.79%
- Navy Federal Credit Union*: 6.08%
- Wells Fargo Bank: 6.12%
- Citibank: 6.20%
- Pennymac: 6.29%
- Cornerstone Home Lending: 6.29%
How hard is it to get a fixed-rate mortgage?
May be harder to get: Because FRMs typically charge higher rates upfront compared to ARMs, you may need a lower debt-to-income ratio (DTI) or a better credit score to qualify for the slightly higher monthly payment.
| 30 year fixed | 6.76% |
|---|---|
| 15 year fixed | 6.01% |
| 10 year fixed | 5.89% |
| 5/1 ARM | 5.95% |
This rule of thumb dictates that you spend no more than 28 percent of your gross monthly income on housing costs, and no more than 36 percent on all of your debt combined, including those housing costs.
A person who makes $50,000 a year might be able to afford a house worth anywhere from $180,000 to nearly $258,000. That's because your annual salary isn't the only variable that determines your home buying budget. You also have to consider your credit score, current debts, mortgage rates, and many other factors.
To afford a $500,000 house, you typically need an annual income between $125,000 to $160,000, which translates to a gross monthly income of approximately $10,417 to $13,333, depending on your financial situation, down payment, credit score, and current market conditions.
